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Substitution bias
________: when some prices in a basket change disproportionately compared to others.
Consumer Price Index
The ________ (CPI) is used to monitor changes in the cost of living over time.
GDP deflator
The ________ reflects the prices of all goods and services produced domestically.
Core CPI
________: a measure of the overall cost of consumer goods and services excluding food and energy.
Inflation rate
________: the percentage change in the price index from the preceding period.
Bureau of Labor Statistics
________ (BLS): a department that computes and reports the CPI.
Cost of living
________ allowance (COLA): a provision that automatically raises the wage when the CPI rises.
price index
Producer ________ (PPI): a measure of the cost of a basket of goods and services bought by firms.
CPI
The ________ uses a fixed basket to measure values, while the GDP deflator compares the price of currently produced goods and services.
Consumers
________ respond to raised prices by buying less of that product.
Indexation
________: the automatic correction by law or contract of a dollar amount for the effects of inflation.
Consumer price index
________ (CPI): a measure of the overall cost of the goods and services bought by a typical consumer.
